Abstract:
The increasing poverty level and dwindling welfare conditions of the residents of Benue state even in the midst of high expanding microfinance institutions motivated the urgent need for a study to evaluate the impact of both formal and informal MFIs jointly to see their impact on poverty alleviation and welfare in Benue state since there have not been any study of such for the state and the poverty rate in the state is on a continuous increase. To achieve this, the study analyzed a primary data that was obtained using a standardized questionnaire from 405 household randomly selected from the three senatorial districts in the state using a Logit regression analysis. The result indicates that policies that promote informal microfinance institutions likely increase the poverty level, while policies to promote formal microfinance institution reduce poverty level. Also that informal microfinance institution has a higher impact on welfare than formal microfinance institutions and that microfinance institution increases household access to credit. Based on these findings, the study recommended among others that Microfinance institutions should be empowered financially to increase their pace both in giving out loans and in canvassing for savings too as this will go a long way in increasing their level of impact on the households.
